Salesforce Inc (CRM) shares were down 2.3% in pre-market trading on Tuesday, following a 1.6% decline in the previous session, as investors positioned ahead of the company’s fiscal second-quarter earnings release scheduled after the market close on Tuesday.
The stock, which has gained 25.6% over the past month but remains 22% lower year-to-date, is trading at $205.69, roughly 24% below its 52-week high of $270.50. The company’s shares have rebounded from a low of approximately $146 earlier this year, supported by strong performance in its cloud-based customer relationship management platform.
Analysts expect CRM to report adjusted earnings per share (EPS) of $3.27 on revenue of $11.33 billion for the quarter ending July 31, according to consensus estimates. The company has beaten EPS expectations in each of the past four quarters, averaging a 17% surprise, though the stock has historically reacted negatively to strong results, including a 1.6% drop following the last quarter’s 24% EPS beat.
JPMorgan initiated coverage with an Overweight rating and a $250 price target, while Truist maintained its Buy rating with a $280 target. The stock carries a consensus of 39 Buy, 12 Hold, and 2 Sell ratings. Valuation metrics remain mixed: the forward price-to-earnings ratio stands at 14.2x, below the long-term multiple of 21.0x, while the price/earnings-to-growth (PEG) ratio is 0.60. Free cash flow yield is 8.7%, and gross margins remain robust at 77.7%, with net margins improving to 18% from 0.7% in fiscal 2023.
Technical indicators suggest the stock is in overbought territory, with the weekly StochRSI at 93.6 and the daily Relative Strength Index at 62.4. Key support levels are identified at $195.69 and $182.22, while resistance is seen at $212.35 and $216.85. The stock has retraced from a downtrend that peaked near $269 earlier this year.
Operational updates include the Agentforce platform reaching $500 million in annual recurring revenue and the company securing government contracts valued at $5.6 billion with the U.S. Army and $1.6 billion with the Department of Veterans Affairs. Salesforce’s annual Dreamforce conference is scheduled for September 15–17 in San Francisco.
